Obtain a new home loan instead of paying rent?

[HipHop]

Would it make a difference if I were to get a loan (provided I get approved of course) now (planning on filing for 13 in 6 months)? I pay $750/month rent, but was thinking it might be beneficial to get into a $1000/month or so mortgage before my credit goes south.

Thoughts?

[lrprn]

Buying a home just to increase your expenses for filing doesn't make sense. You are filing to REDUCE your debt load, not INCREASE it.

[IBroke]

Buying a home just to increase your expenses for filing doesn't make sense. You are filing to REDUCE your debt load, not INCREASE it.

I do think there are many other reasons to buy a home in that situation.

I'd rather pay $1000/month on my own home
instead of "wasting" $750/month for rent (IF you HAVE the opportunity to own a home but you are renting, you ARE burning money).

Especially in the long term, IF you pick the property wisely (foreclosure short sale etc.), I wouldn't even consider it an increase of debt load since we are talking about Real Estate and not about a credit card.

Buying the right proprty at the right price (yes, even now under these circumstances) could be the smartest move you can make. There is no future perspective in renting...

[bpn2009]

Would it make a difference if I were to get a loan (provided I get approved of course) now (planning on filing for 13 in 6 months)? I pay $750/month rent, but was thinking it might be beneficial to get into a $1000/month or so mortgage before my credit goes south.

Thoughts?

If you have never owned a home before I would carefully consider your expenses that come along with home ownership. You may not pay for sewer, garbage and water with renting (assuming you're in an apartment). Also, you need to keep some funds on hand for those pesky little home repairs that always seem to cost about $1,000 per episode.

I'm not trying to discourage you from home ownership, but go into it knowing what you're getting in too.

[woeisme]

I agree, owning a home involves a lot of expenses and upkeep that renting does not. Roofs leak, furnaces die, appliances go on the fritz, electrical, plumbing cost, the list goes on and on. Do you have time to mow the lawn, clean out the gutters, shovel the snow (I'm in Ohio and we got snow today!!!) on and on. Not to say there aren't distinct advantages to owning over renting, but you need eyes wide open and to realize that the mortgage isn't the half of it! And I didn't mention taxes, home owners insurance, the list goes on and on. I'd expect to spend 3-5% of your mortgage amount in annual maintenance (so for a 100K house, expect an additional 3-5K per year of expenses on top of your mortgage.)

[HHM]

I think you may answer your own question. "Assuming you get approved." If you are planning on filing chapter 13 in 6 months, I suspect your credit is not in tip top shape (you have too much debt, obviously). Also, you need a minimum of 3.5% down plus a mortgage insurance premium, where is that going to come from?

[EricaCallaha]

We considered the very same thing. We were given the option to buy the previous home we were in. But having lived in the house for 3 years...we knew what was wrong with it. So we moved down the street (literally, same block), and continue to rent. Living in the new house for 2 weeks...the basement had sprung a leak that turned out to be a small foundation crack. Being as well connected as our landlord is (and us too), he was able to get it repaired for $500. But if he didn't....it would have been $5,000 easily. Being in our 13, we don't have that kind of buck laying around to fix a house. Thank goodness that we didn't have to shell out. These are the things to think about.

When you usually start your 13 experience, you don't have any extra money. As time goes on and you learn to budget, a little extra cash becomes available to sock away. Why not go through your 13, save as much as you can and then try to purchase a home. That way you will have a clean slate to really start with.

Good luck....